The Open Market Committee (FOMC) “decided to conclude its (QE) asset purchase program this month.”

It’s “maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction.”

“This policy, by keeping the Committee’s holdings of longer-term securities at sizable levels, should help maintain accommodative financial conditions.”

Over the last quarter of a century, “(w)hat has been growing is the wealth of the rich, the remit of the state, the girth of Wall Street, the debt burden of the people, the prosperity of the beltway, and the sway of the three great branches of government which are domiciled there – that is, the warfare state, the (corporate) welfare state and the central bank.”

“What is failing, by contrast, is the vast expanse of the Main Street economy where the great majority has experienced stagnant living standards, rising job insecurity, failure to accumulate any material savings, rapidly approaching old age and the certainty of a Hobbesian future where, inexorably, taxes will rise and social benefits will be cut.”

“And what is positively falling is the lower ranks of society whose prospects for jobs, income and a decent living standard have been steadily darkening.”

Current conditions reflect a dystopian new normal, he believes. Historic patterns no longer apply. America is a “foundering leviathan.”

It can’t save the economy or society. It’s “fallen victim to its own inherent shortcomings,” mismanagement, and “inefficiencies.”

It’s “dysfunction(al) and incoheren(t).” It operates on “continued flows of maniacal monetary stimulus.”

Monied interests run things. So do powerful lobbies representing them. Private looting takes precedence over popular interests. Things go from bad to worse.

“In the absence of a multiplier, open market operations, which simply change reserve balances, do not directly affect lending behavior at the aggregate level.”

“Put differently, if the quantity of reserves is relevant for the transmission of monetary policy, a different mechanism must be found.”

“The argument against the textbook money multiplier is not new. For example, Bernanke and Blinder (1988) and Kashyap and Stein (1995) note that the bank lending channel is not operative if banks have access to external sources of funding.”

“The appendix illustrates these relationships with a simple model. This paper provides institutional and empirical evidence that the money multiplier and the associated narrow bank lending channel are not relevant for analyzing the United States.”

He said QE fell short of its goals. Bond-buying was a mixed bag. It lifted asset prices hugely. Lowered borrowing costs.

Did little for the real economy. “Effective demand is dead in the water,” he said. Bond buying didn’t help.

“I don’t think it’s possible” for easy money to end trouble-free, he added.

“We’ve never had any experience with anything like this, so I’m not going to sit here and tell you exactly how it’s going to come out.”

“I think that real pressure is going to occur not by the initiation by the Federal Reserve, but by the markets themselves.”

“Recent episodes in which Fed officials hinted at a shift toward higher interest rates have unleashed significant volatility in markets, so there is no reason to suspect that the actual process of boosting rates would be any different.”

Greenspan failed to explain how much he contributed to today’s debacle. He chaired the Board of Governors from August 11, 1987 until January 31, 2006.

Supporters praised his steady hand. Critics called him Maestro of Misery.

“Secrets of the Temple: How the Federal Reserve Runs the Country” author William Grieder ranked him “among the most duplicitous figures to serve in modern American government.”

Using “his exalted status as economic wizard (to) regularly corrupt the political dialogue by sowing outrageously false impressions among gullible members of Congress and adoring financial reporters.”

Exceeded by Ben Bernanke. His Fed tenure was deplorable.

Betraying the public trust and then some.

His agenda was ruthlessly anti-populist. Doing more to thirdworldize America for profit than any of his predecessors.

Creating a protracted Main Street Depression. Making poverty, unemployment and underemployment growth industries. Wrecking millions of lives. Unapologetically to this day.

Naked Capitalism’s Yves Smith believes Fed governors know “QE was largely a failed experiment. (They) never gave Congress an adequate explanation of the logic and expected effects of QE so (they) could be held accountable” for their actions.

Stephen Lendman was born in 1934 in Boston, MA. In 1956, he received a BA from Harvard University. Two years of US Army service followed, then an MBA from the Wharton School at the University of Pennsylvania in 1960. After working seven years as a marketing research analyst, he joined the Lendman Group family business in 1967. He remained there until retiring at year end 1999. Writing on major world and national issues began in summer 2005. In early 2007, radio hosting followed. Lendman now hosts the Progressive Radio News Hour on the Progressive Radio Network three times weekly. Distinguished guests are featured. Listen live or archived. Major world and national issues are discussed. Lendman is a 2008 Project Censored winner and 2011 Mexican Journalists Club international journalism award recipient.

About Stephen

Stephen Lendman was born in 1934 in Boston, MA. In 1956, he received a BA from Harvard University. Two years of US Army service followed, then an MBA from the Wharton School at the University of Pennsylvania in 1960. After working seven years as a marketing research analyst, he joined the Lendman Group family business in 1967.